Spot Gold continues to test support at $1240/$1250 an ounce. Respect, indicated by recovery above $1260, is likely and would signal an advance to $1300.
Is the Donald long gold?
Don’t know if he is long, but Donald Trump is doing his best to drive up demand for gold.
From the FT overnight:
Donald Trump has warned that the US will take unilateral action to eliminate the nuclear threat from North Korea unless China increases pressure on the regime in Pyongyang.
In an interview with the Financial Times, the US president said he would discuss the growing threat from Kim Jong Un’s nuclear programme with Xi Jinping when he hosts the Chinese president at his Florida resort this week, in their first meeting. “China has great influence over North Korea. And China will either decide to help us with North Korea, or they won’t,” Mr Trump said in the Oval Office.
“If they do, that will be very good for China, and if they don’t, it won’t be good for anyone.”
But he made clear that he would deal with North Korea with or without China’s help. Asked if he would consider a “grand bargain” — where China pressures Pyongyang in exchange for a guarantee that the US would later remove troops from the Korean peninsula — Mr Trump said:
“Well if China is not going to solve North Korea, we will. That is all I am telling you.”
Nothing like the threat of nuclear war to drive up the price of portable assets. Not that it would do much good if you are on the receiving end.
Spot Gold broke resistance at $1250 an ounce. Follow-through above $1260 is likely and would signal an advance to $1300.
Theresa May had a calmer, less belligerent approach: “….encourage China to look at this issue of North Korea and play a more significant role in terms of North Korea … I think that’s where our attention should focus.”
Gold bullish as Dollar finds support
10-year Treasury Yields are consolidating around the 2.5% level. Upward breakout is likely and would signal an advance to 3.0%.
The Dollar Index has found support, with a large engulfing candle at 100. Recovery above the descending trendline would suggest a fresh advance, with a target of 108*. Reversal below 99 is unlikely but would warn of a test of primary support at 93.
* Target calculation: 104 + ( 104 – 100 ) = 108
China’s Yuan continues to weaken, with USDCNY in a strong up-trend. Shallow corrections flag buying pressure. 13-week Twiggs Momentum oscillating above zero indicates a strong up-trend.
Spot Gold is testing support at $1240/$1250 an ounce. Recovery above $1260 is likely and would signal an advance to $1300.
Gold benefits from Dollar fall
The Dollar Index continues its downward path, having breached support at 100. Follow-through below the rising trendline at 99 would warn of a test of primary support at 93.
Spot Gold has benefited. Currently testing resistance at $1250/ounce, narrow consolidation is a bullish sign. Follow-through above $1260 would confirm a target of $1300. Crossover of 13-week Momentum to above zero is also bullish, suggesting a primary up-trend.
Gold rallies as Dollar falls
The Dollar Index rally is falling despite rising interest rates. Chinese sell-off of foreign reserves to support the Yuan may be a factor.
Spot Gold rallied off support at $1200/ounce. Recovery above $1250 would confirm an up-trend, with the next target at $1300.
Gold bears grow as Fed hints at rate hike
The Fed is expected to hike interest rates next week. 10-year Treasury yields broke resistance at 2.5 percent, signaling an advance to the 2013/2014 high of 3.0 percent. Breakout above 3.0 percent is still a way off but would complete a large double bottom signaling the end of the 30-year secular bull market in bonds. Rising interest rates are bearish for gold.
The Dollar Index rally continues to meet resistance, with tall shadows on the last four weekly candles signaling selling pressure. Rising interest rates could strengthen the advance, with bearish consequences for gold, but Chinese sell-off of foreign reserves (to support the Yuan) is working against this.
Spot Gold is testing support at $1200/ounce. Recovery above $1250 would indicate that the recent down-trend has ended. But breach of support is more likely and would warn of another test of long-term support at $1050/ounce.
Gold hesitates as Fed hints at rate hike
From WSJ:
Federal Reserve Chairwoman Janet Yellen signaled the central bank is likely to raise short-term interest rates at its March meeting and suggested more increases are likely this year if the economy performs as expected.
“At our meeting later this month, the [Federal Open Market] Committee will evaluate whether employment and inflation are continuing to evolve in line with our expectations, in which case a further adjustment of the federal funds rate would likely be appropriate,” Ms. Yellen said in remarks prepared for delivery at the Executives’ Club of Chicago.
The Dollar Index rally continues to meet resistance, with tall shadows on the last three weekly candles signaling selling pressure. Rising interest rates would strengthen the advance, with bearish consequences for gold.
Spot Gold hesitated at $1250/ounce. Rising interest rates also increase the opportunity cost of holding precious metals. Reversal below $1200 would warn of another decline but recovery above $1250 remains more likely and would signal an advance to $1300.
Gold breaks through $1250
10-Year Treasury Yields are testing support at 2.30%. Expect this to hold. Breach of the rising trendline would warn of a correction but this seems unlikely with the Fed intent on normalizing interest rates. Breakout above 2.50% would offer a target of 3.0%.
The Dollar Index rally remains muted since finding support at 100. Rising long-term yields would fuel the advance, with bearish consequences for gold.
China’s Yuan is consolidating. Resistance on USDCNY at 7 Yuan is likely to be tested soon.
The PBOC has been burning through its foreign reserves to slow the rate of depreciation against the Dollar, to create a soft landing. A sharp fall would destabilize global financial markets and fuel capital flight from China.
Spot Gold broke through resistance at $1250, signaling an advance to $1300.
Interest rates bearish for gold
10-Year Treasury Yields are consolidating below resistance at 2.50%. Long tails suggest medium-term buying pressure. Breakout is likely and would offer a target of 3.0%.
The Dollar Index rally has so far been muted since finding support at 100. But rising long-term yields are likely to fuel the advance, with bearish consequences for gold.
Spot Gold is consolidating below $1250/ounce. Reversal below $1200 would warn of another decline. Breach of primary support at $1130 would confirm. Arguments for a further advance appear weak, but breakout above $1250 would signal an advance to $1300.
Gold rallies but Dollar bottoms
Rising uncertainty has fueled an extended Gold rally. Respect of support at $1200/ounce suggests another advance, this time to $1300, but a lot will depend on the Dollar.
The Dollar Index, however, found support at 100. Respect would suggest another advance and a primary up-trend. With bearish consequences for gold.
